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Unions, Works Councils and Plant Closings in Germany

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Author Info
Addison, John T. () (Moore School of Business, University of South Carolina, and IZA, Bonn)
Bellmann, Lutz (Institute for Employment Research (IAB), Nuremberg and IZA, Bonn)
Kölling, Arnd (Institute for Employment Research (IAB), Nuremberg)

Additional information is available for the following registered author(s):

Abstract

This paper present paper provides the first results for Germany on the impact of works councils and collective agreements on plant closings, using data from the IAB establishment panel. We find evidence of a robust positive association between works council presence and plant closures. The strictures of collective agreements do not seemingly affect closings. By the same token, and contrary to some recent findings on other aspects of establishment performance, the presence of a collective agreement does not attenuate the impact of local workplace representation on closings. Our analysis does nothing to encourage a sanguine view of recent legislation in Germany that facilitates the formation of works councils and strengthens their codetermination powers.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 474.

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Length: 32 pages
Date of creation: Apr 2002
Date of revision:
Handle: RePEc:iza:izadps:dp474

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Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
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Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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Related research
Keywords: rent seeking; workplace representation; industry/regional collective bargaining; codetermination; plant closings;

Other versions of this item:

Find related papers by JEL classification:
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Manning, Alan, 1993. "Pre-strike Ballots and Wage-Employment Bargaining," Oxford Economic Papers, Oxford University Press, vol. 45(3), pages 422-39, July. [Downloadable!] (restricted)
    Other versions:
  2. Richard B. Freeman & Edward P. Lazear, 1995. "An Economic Analysis of Works Councils," NBER Chapters, in: Works Councils: Consultation, Representation, and Cooperation in Industrial Relations, pages 27-52 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  3. Stewart, Mark B, 1995. "Union Wage Differentials in an Era of Declining Unionization," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 57(2), pages 143-66, May.
  4. Hübler, Olaf & Jirjahn, Uwe, 2001. "Works Councils and Collective Bargaining in Germany: The Impact on Productivity and Wages," IZA Discussion Papers 322, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Addison, John T & Chilton, John B, 1998. "Self-Enforcing Union Contracts: Efficient Investment and Employment," Journal of Business, University of Chicago Press, vol. 71(3), pages 349-69, July. [Downloadable!] (restricted)
  6. Alex Bryson, 2002. "The Union Membership Wage Premium: An Analysis Using Propensity Score Matching," CEP Discussion Papers dp0530, Centre for Economic Performance, LSE. [Downloadable!]
  7. Fitzroy, Felix R & Kraft, Kornelius, 1987. "Efficiency and Internal Organization: Works Councils in West German Firms," Economica, London School of Economics and Political Science, vol. 54(216), pages 493-504, November. [Downloadable!] (restricted)
  8. Bronars, Stephen G & Deere, Donald R, 1993. "Unionization, Incomplete Contracting, and Capital Investment," Journal of Business, University of Chicago Press, vol. 66(1), pages 117-32, January. [Downloadable!] (restricted)
  9. Addison, John T. & Bellmann, Lutz & Schnabel, Claus & Wagner, Joachim, 2002. "The Long Awaited Reform of the German Works Constitution Act," IZA Discussion Papers 422, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Macpherson, D.A. & Dunne, T., 1992. "Unionism and Gross Employment Flows," Working Papers 1992_10_5, Department of Economics, Florida State University.
  11. Addison, John T & Schnabel, Claus & Wagner, Joachim, 2001. "Work Councils in Germany: Their Effects on Establishment Performance," Oxford Economic Papers, Oxford University Press, vol. 53(4), pages 659-94, October.
  12. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May. [Downloadable!] (restricted)
  13. John T. Addison & Paulino Teixeira & Thomas Zwick, 2006. "The Impact of Works Councils on Wages," GEMF Working Papers 2006-08, GEMF - Faculdade de Economia, Universidade de Coimbra. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Gavin Cameron & Chris Wallace, 2002. "Macroeconomic Performance in the Bretton Woods Era, And After," Economics Series Working Papers 130, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  2. Alda, Holger & Allaart, Piet & Bellmann, Lutz, 2005. "Churning and institutions : Dutch and German establishments compared with micro-level data," IAB Discussion Paper 200512, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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